Compare car insurance for drivers under 25

If you’re under 25 years old, you’ll pay more for car insurance than older drivers, although your rates drop slightly once you reach age 25. To find the best deal on your car insurance policy, balance a moderate level of coverage that fits how much you drive and compare a variety of insurance companies.

Car insurance costs for drivers under 25

If you’re between ages 22 to 25, your car insurance premium can average $43–$50 a month, according to Finder’s rate analysis. That’s a yearly cost of $520–$602 for liability-only coverage. Of these ages, 25-year-olds hold the cheapest rate because insurers often drop prices at this age.

Also, all drivers under 25 should compare multiple companies since every person gets a unique quote based on their driving history, car and state. Overall, Safeco offers the cheapest rates for 22- to 25-year-olds, costing $25 a month.

• Car insurance age 25
• Car insurance age 24
• Car insurance age 23
• Car insurance age 22

• Quote methodology: driver profile & coverage options

  To get these quotes, we compared rates for the same driver profile in a popular California zip code.

  • Male driver
  • 22–25 years old
  • Single
  • 2017 Toyota Camry LE
  • State minimum coverage: 15/30/5 liability

What to consider when buying car insurance

After finding several policies that suit you, it’s time to compare prices by getting quotes. Remember that your goal is to find the car insurance that’s right for you. This might not always be the cheapest.

• Meet all requirements. You need at least the minimum coverage required by your state, but in most cases, you should consider higher liability limits in case a legal matter comes up. Car loans also require you to add comprehensive and collision coverage.
• Consider when to buy extras. If you drive an older car with no loan, you may not want the added cost of comprehensive and collision coverage, which pays for damage to your car. But consider extra protection for new, classic, luxury or modified cars.
• Look at different insurers. Research each company’s reputation, their claims record and their level of customer service. And when getting quotes, choose the same coverage to make sure you’re comparing the same policies.
• Compare premiums. Since your insurance costs are probably high, prioritize companies that offer low rates along with solid coverage and service.
• Understand what’s excluded. Know the situations when your insurance company won’t pay, and ask questions if you don’t understand an exclusion listed on your policy. For example, you might have coverage for theft as long as you keep your car locked.

Ways to save on car insurance if you’re under 25

The biggest areas that help you save as a young driver are the amount of coverage you have, a violation-free driving record and low mileage. To keep your premiums low, you can:

• Set the right limits. You set limits on your coverage that protect you for a maximum amount of damage, like $25,000. Higher limits add to your premiums, so set liability limits in between what’s required and the highest limits.
• Consider your deductible. You have to pay this flat fee before your insurer pays for a claim. You can choose a higher deductible like $1,000 to lower premiums, if you can afford the extra cost after an accident.
• Keep your car secure. Park in a garage or driveway, and add security such as an antitheft alarm or tracking device. This lowers the chance that someone else will hit or steal your car.
• Get rewarded for low mileage. If you don’t plan to drive a lot, look for a pay-as-you-drive policy, or ask for a low-mileage discount on your policy.
• Monitor your credit. Most insurers consider your credit score when setting your premium.
• Stick with your parent’s policy. If possible, stay on your parent’s car insurace for as long as you’re allowed, such as if you’re living with them or continuing college. Or you can add another responsible driver that lives with you to your policy, such as your roommate or partner.
• Limit who can drive your car, and preferably limit it to those who are over 25. You may avoid accidents and insurance rate increases from a friend crashing your car.

Why is car insurance expensive for younger drivers?

Age isn’t just a number. Insurance companies see younger drivers as more of a risk, so you pay higher rates based on your age. Drivers under 21 are the highest risk group since studies show that they tend to get in more accidents and make more claims than older, more experienced drivers.

But the older you get and the more experience you get behind the wheel, the lower your rates get. Expect cheaper insurance with every birthday you celebrate.

Discounts for drivers under 25

If you’re under 25 and just finished school, you may lose your student discount. But there are many more car insurance discounts available from most insurance providers you can probably qualify for.

• Defensive driving. Most insurers reward you with a 5% to 10% discount if you take a refresher driving course.
• Buy online. Get up to 20% off for getting an online quote or signing up for your new policy online.
• Multicar discount. If you have more than one driver in your home, you can save money by putting all drivers on the same policy.
• Bundling discount. Save as much as 25% or 30% by combining insurance policies like renters and car insurance with the same provider.
• Claims-free discounts. Not filing a claim for a number of years can keep your premiums down.
• Safety discounts. A good driving history and antitheft devices help to lower your insurance premium, and some insurers offer savings for cars with driver assistance or daytime running lights.
• Good student. If you’re finishing up college or continuing your education, major insurers like Allstate and Geico offer discounts for students up to 24 or 25 years old.
• Paid in full discount. If you are financially able to pay for your policy in full, you are likely to get a discount.
• Telematics discount. Only pay for how well and how much you drive with a usage-based discount.

Coverage to consider if you’re under 25

No matter how old you are, there are different types of car insurance coverage to choose from that generally stay the same. And one of them, liability coverage, is mandatory in most US states.

Liability covers bodily damage and property damage to the other driver and passengers if you’re found to be at fault in an accident. However, liability does not cover damages to your own car nor the cost of your own injuries. Coverage for damage to your own car falls under collision.

The other two main categories include comprehensive, and uninsured and underinsured. Comprehensive covers damage caused by almost anything other than a collision. Uninsured and underinsured pay for damages if you’re hit by a driver without enough insurance to cover the costs.

It is usually wise to add additional coverage on top of the minimum liability coverage, depending on your price range and coverage needs.

What to watch out for

The main pitfall is that you could forget to update your policy after important changes or that you could mislead your insurer to lower rates. Consider these pitfalls.

Bottom line

While younger drivers often pay more for car insurance, you can still save on insurance rates even if you’re under 25. Compare your car insurance options to find the best deal on insurance for your car.

Questions about car insurance for drivers under 25

• Why does car insurance for younger drivers cost so much?

  Car insurance for this age group is so expensive because younger drivers are less experienced.

  Not only are they statistically more likely to be involved in accidents, and therefore more likely to make claims, their accidents also tend to be more severe than older drivers, resulting in more expensive claims. This combination drives prices up from all car insurance providers.

• I'm a nominated driver on my parent's insurance policy. What happens if I have an accident in their car?

  You or your parents would need to pay any deductible related to the accident.

• Do I need to tell my insurer about a new sound system?

  Yes. This is considered a nonstandard accessory and all such modifications to your vehicle need to be reported to your insurer, otherwise they may not be covered by your insurance.

• Is third party insurance enough coverage if my vehicle is not worth much?

  Usually, however it depends on whether you can afford to repair or replace it yourself in the event of an accident, and how much you depend on having a working car.

Written by

Roslyn McKenna

Publisher

Roslyn McKenna Ayers is insurance manager at ValuePenguin and a former publisher at Finder, specializing in home and auto coverage. Her expertise and analysis has been featured on Bankrate, MSN and Reader's Digest. She holds a BA in writing and communications from Maryville College. See full bio